The personalization imperative   

Know your customer

For a long time, mass communication was the only way for businesses to send a message to a larger audience. Technological boundaries prevented to make the distinction between persons and hence everybody received the same message. With the introduction of customer loyalty cards, companies are able to target different segments based on their customers’ shopping behavior and spending. In addition, in the era of online shopping, analytics departments are better able to get to know their customers and are able to reach them in real time.

From Segmentation to Personalization

The first step from a general message to personalization, is dividing customers in broad segments based on business rules for example based on age, or new/repeat visitor. Personalization is nothing more than very detailed segments. Of course, delivering more personal messages to a large audience requires advanced analytical models, which take a great amount of time to develop and test.

Segmentation is a good middle ground for those who would like to take the journey of individual tailored content. A great way to start is using techniques like K-means, Self-Organizing Maps (SOM) or Propensity Modeling Score. These techniques automatically cluster together customers with shared characteristics based on tons of variables. These clusters can then be used as input for targeted advertisements, recommended TV shows or custom product offers. For those who continue the journey towards full personalization need to invest in self-learning algorithms. These algorithms have the ability to adjust the output when new information about the customer becomes available; the more details you have about the customer the better they can be served.

Next-Best-Action

Personalization and segmentation are no self-standing goals. Rather, the output can be used for all kinds of purposes and it is this use case that defines the success of personalization. We call this the next-best-action. For example, personalization can be used to improve the customer journey by creating a better online experience that stimulates the Revenue per Visit. For customers that appreciate guidance while browsing the website, helpful pop-ups and chat box options can be shown as the next-best-action. By providing relevant recommending products in a web shop, the Average Order Value gets boosted because visitors are seduced to add more items to their basket. And by sending out e-mails tailored to your audience at the right moment, the click-through-rate will increase, bringing more visitors to your site.

Tools

As with many things, ‘think big and start small’ applies on personalization as well. Using common digital analytics tools, like Adobe and Google allows you to create custom segments and with additional products from these vendors or third-party vendors, you can start leveraging these segments by delivering personalized content to your costumers. In this stage, it is preferred to start with the obvious segments like gender, new/repeat visitor, or leverage the knowledge from the entry channels and campaigns.

Collecting more data about the customers allows moving towards more advanced segmentation or even personalization. But in order to do so, a more advanced data infrastructure is required. A Data Management Platform (DMP) can help you with this challenge and combines all kind of details from different touchpoints including your CRM system. A DMP is not only able to provide this 360 view on your customer, it does this real-time which is needed to define the next-best-action for the key segments or even the individual customer. However, most DMPs are not able to deliver personalized content to the customer and hence additional content management software is needed to do so. Most DMP suppliers provide such software as well and otherwise there are plenty of third-party tools that can do the job.

More information

Are you looking for best practices that can help you personalize the customer journey of your organization through multiple channels or simply want more information on digital pesonalization? Please don't hesitate to contact Tiuri or Pim via the contact details below.